Middle East Conflict Spurs Stocks and Oil Price Drop: What Investors and Business Owners in Oman Should Know
Oil prices fell below $100 per barrel on Friday but remained significantly higher than levels seen before the Middle East conflict, which shows no signs of resolution. As the war approaches its third week, global equity markets mostly declined amid growing concerns over a prolonged crisis that could exacerbate inflation and damage the global economy.
Joshua Mahony, chief market analyst at Scope Markets, emphasized that “fears of a burgeoning energy crisis remain front and centre for investors,” with inflationary worries intensifying as the situation persists.
Before the conflict, major central banks were expected to reduce interest rates; however, they are now widely anticipated to either hold borrowing costs steady or increase them next week to curb inflationary pressures.
Despite agreements among leading economies to release some of their strategic crude reserves, analysts suggest this measure does little to resolve supply disruptions. Iran has pledged to continue targeting oil facilities in the Middle East and to obstruct the critical Strait of Hormuz.
In an effort to alleviate supply challenges, the US Treasury Department announced a temporary allowance for the sale of Russian oil already at sea. However, German Chancellor Friedrich Merz criticized this decision as “wrong,” arguing it could fund Moscow’s military efforts against Ukraine.
Similarly, French President Emmanuel Macron stated that easing sanctions on Russia, imposed in response to its invasion of Ukraine, is “in no way” justified. Meanwhile, Moscow has urged the United States to lift more sanctions on its oil exports, claiming this would help stabilize global energy markets.
In currency markets, the US dollar maintained its gains against major currencies, supported by its safe-haven status and expectations that US interest rates will remain elevated longer than previously anticipated.
AJ Bell investment director Russ Mould highlighted the significance of upcoming interest-rate meetings at the Federal Reserve, Bank of England, and other central banks, describing them as occurring at a “delicate time.” He noted markets are closely monitoring whether policymakers view rising oil and gas prices as a temporary spike or a factor that could significantly influence inflation and interest rate outlooks.
Key market figures at close:
– Brent North Sea Crude: down 1.4% at $99.03 per barrel
– West Texas Intermediate: down 1.9% at $93.87 per barrel
– FTSE 100 (London): down 0.3% at 10,275.72 points
– CAC 40 (Paris): down 0.5% at 7,949.93
– DAX (Frankfurt): down 0.3% at 23,512.25
– Nikkei 225 (Tokyo): down 1.2% at 53,819.61
– Hang Seng Index (Hong Kong): down 1.0% at 25,465.60
– Shanghai Composite: down 0.8% at 4,095.45
– Dow Jones (New York): down 1.6% at 46,677.85
Currency exchange rates:
– Euro/dollar: down to $1.1464 from $1.1514
– Pound/dollar: down to $1.3260 from $1.3346
– Dollar/yen: up to 159.41 yen from 159.39 yen
– Euro/pound: up to 86.44 pence from 86.27 pence
— خبرگزاری فرانسه
تحلیل ویژه از عمانت | بازار عمان را کشف کنید
The ongoing Middle East conflict and resultant oil supply disruptions have kept prices elevated, posing inflationary risks for both local and global economies. برای کسبوکارها در عمان، این به معنای continued revenue potential in energy sectors and heightened operational costs, emphasizing the need for strategic cost management and diversification. Smart investors should monitor geopolitical developments closely, as energy market volatility could create bold opportunities in upstream oil ventures and alternative energy investments while also necessitating caution against inflation-driven market downturns.
